The U.S. Federal Reserve is likely to continue removing policy accommodation gradually and could hike rates three times this year, Dallas Fed President Robert S. Kaplan told a business conference in Frankfurt on Thursday.

Kaplan said recent market volatility in itself was not enough to change his base scenario, although he was "highly vigilant" about the turbulence and would study whether it has any effect on the real economy.

"At this point, I don't see this market adjustment spilling over into financial conditions - but Ill be watching carefully," Kaplan, a non-voting member of the Fed's policy committee, told reporters in Frankfurt. "My base case is the same."

The Fed increased rates three times last year, with the last, 0.25 point move coming in December.

U.S. stocks have sold off sharply this month on worries that rising wage inflation could force the Fed to tighten policy more quickly. But markets have calmed down and recovered some ground in the last two days.

Kaplan said that any removal of stimulus would be gradual and careful, without pre-commitment to any particular rate path.

Rapid growth and low unemployment are the key arguments for policy tightening and Kaplan predicted that the jobless rate could dip below 4 percent this year, beyond what is considered full employment.

Overall growth is likely to peak this year and may slow somewhat next year and in 2020, he added.

"2018 will be a strong year in the United States," Kaplan said. "We think we're at or near full employment in the U.S. Wed expect headline unemployment to dip below 4 percent during this year."